Forex – Sterling Hits Day’s Lows as UK Unemployment Rises

Investing.com – The pound fell to the day’s lows on Wednesday after the latest UK jobs report showed that the unemployment rate ticked higher, dampening expectations for a rate hike despite a pickup in wage growth.

GBP/USD was down 0.36% to 1.3943 by 04:53 AM ET (09:53 AM GMT), from around 1.3965 earlier.

Sterling fell after the Office for National Statistics reported that Britain’s unemployment rate ticked up to 4.4% in the three months to December, from a four decade low of 4.3%. It was the first increase in the jobless rate in nearly two years.

The number of people out of work rose by 46,000 to 1.47 million.

The report also showed that the number of people in employment rose by 88,000 in the three months to December, to 32.147 million.

The report showed that wage growth picked up, but earnings continued to lag behind inflation, which is currently running at an annual rate of 3%.

Average earnings rose by an annual 2.5% in the three months to December, the ONS said, up from 2.3% in the previous month.

Average earnings, including bonuses, also rose by 2.5% during the period, unchanged from the previous month.

The uptick in the unemployment rate dampened expectations for a rate hike by the BoE in the coming months, despite the better wage growth figures.

The euro touched the days’ highs against sterling following the jobs report, with EUR/GBP last at 0.8832 from around 0.8825 earlier.

The composite output index, which measures the combined output of both the manufacturing and service sectors slowed to 57.5 from 58.8, against expectations for 58.5. It was the slowest expansion since November but was still strong.